Analyst: Northern Pass could save customers about $18 a year

CONCORD — Building Northern Pass would save energy customers who use 300 kilowatt hours per month an average of $18 a year, a project witness testified Tuesday.

"By infusing new (energy) supply into the market that’s competitive, it will create those rate savings," said Julia Frayer, managing director with London Economics who specializes in economic analysis and market design issues related to energy infrastructure.

Frayer told the state Site Evaluation Committee that the $18 a year savings is a "blended" rate that is calculated by including residential, commercial and industrial customers.

Northern Pass spokesman Martin Murray said later that the projected $18 annual savings is an average for all electric customers in New Hampshire for the years 2020 to 2030.

Eversource residential customers use an average of 600 kilowatt hours a month, but their specific savings are unknown because calculations haven’t been done solely for residential customers, he said.

The proposed $1.6 billion project needs several state and federal approvals before it can start operating in late 2019 or early 2020. Project officials hope to garner all necessary approvals by the end of this year. The route runs from Pittsburg to Deerfield and includes 60 miles of buried lines.

Murray said Northern Pass is projected to save New Hampshire customers $60 million a year in wholesale energy costs.

Frayer said the $18 yearly figure would have been $24 based on 2015 conditions, but energy costs have dropped.

Attorney Melissa Birchard, a staff attorney for the Conservation Law Foundation New Hampshire, reviewed various estimates on projected benefits in reducing carbon emissions.

Birchard said a 2010 news release from Public Service of New Hampshire, now Eversource, stated that Northern Pass was expected to reduce regional carbon dioxide emissions by up to 5 million tons per year. Birchard then cited Frayer’s 2015 estimate of 3.3 million tons and a 2017 estimate of 3.2 million.

Frayer said she wasn’t involved in developing the 2010 estimate.

"In 2010, if we had studied this project, we would have expected also at that time much bigger carbon emissions reductions because, at that time, we had a different carbon emissions footprint in New England," she said. "But in part due to the success of the RGGI program, RGGI, the carbon emissions footprint of the region as a whole has come down and therefore the carbon emissions avoided by a project like Northern pass will be lower ..."

RGGI, or Regional Greenhouse Gas Initiative, is a regional effort to cap and reduce carbon dioxide emissions from the power sector, according to its website.

The capacity of Northern Pass also is smaller than first proposed, Frayer said.

Frayer was asked about a recent state Supreme Court decision that sided with dozens of communities — and against Eversource — over property assessments and how much Eversource should pay in taxes for non-Northern Pass infrastructure.

"As I said, if Northern Pass has to pay higher property taxes (than projected), those local property taxes, the revenues collected, will allow the local governments to expand services, which will amplify economic activity and increase the local economic benefits beyond what we have measured," Frayer said.

She said "property taxes are a cost of doing business for the project" and would be paid through a fee imposed on companies using the transmission lines to move power.